Here’s How to Balance the Budget

The main message is that restraining the growth of government is the right way to get rid of red ink, so there is no conflict between advocates of limited government and supporters of fiscal balance.

More specifically, the video shows that it is possible to quickly balance the budget while also making all the 2001 and 2003 tax cuts permanent and protecting taxpayers from the alternative minimum tax. All these good things can happen if politicians simply limit annual spending growth to 2 percent each year. And they’ll happen even faster if spending grows at an even slower rate.

On the surface, it sounds feasible, and you briefly assert that entitlements will have to be reformed. But realistically, with the impending retirement of the baby boom generation, how do you limit growth of social security and medicare to 2% per year?

[…] Dan Mitchell of the Cato Institute calls “bull” on this. In this short video, he shows how one could easily balance the budget by doing something almost unheard of in Washington: showing some restraint. […]

[…] Dan Mitchell of the Cato Institute calls “bull” on this. In this short video, he shows how one could easily balance the budget by doing something almost unheard of in Washington: showing some restraint. […]

Lonely, feedback comes in many forms… Just look at the comments here. You say that the suggestion to limit the activities of the federal government is “flip and naive,” then go on to call for “reduced military spending, reduced wages and benefits for federal employees, and reductions in the federal workforce.” I assume you regard your suggestions as serious and informed, right? And then you dismiss the idea of spending caps because it ignores “mandated increases in spending.” Mandated by whom? Why, by the very body that would have to enact the spending caps, of course! Why do you think they can do one, but not the other?

Another commenter wants to legalize marijuana. Now that’s a major issue facing society, right? Smoking tobacco is bad, but smoking pot is good?

A third person wants to cut the size of the Defense Department. Um, have you noticed that we’re at war with some nasty people who seriously want to do us harm? Perhaps you should get serious, too.

Lastly, it’s easy to limit spending increases to 2%. Just get Congress to enact a law that requires that federal government spending grow by no more than 2% each year. If we can elect a Congress that will enact caps, we can certainly elect a Congress that will limit spending growth to 2%.

But first we have to be serious with our proposals. I think Dan’s ideas deserve a more serious response than I’m seeing here.

I do think calls for shutting down entire departments and returning to a “Constitutional” footprint have a very low probability of success – perhaps I should have said that rather than calling them flip and naive…

And perhaps I am after something much different than Dan – or you are looking for.

I long for a return to a smaller and less intrusive government. I am in the tradition of Friedman and Buckley opposed to the criminalization of private, consensual behavior – including drug use and what happens in the privacy of one’s home.

I am against the demonization of smoking and drinking that we are now seeing extended into eating/food choices. I do believe that “Liberty” should include the freedom to make an informed choice on whether one smokes – drinks or does drugs.

Caps strike me as a bit cowardly – the net effect of caps if they are implemented and work as Cato/Dan envision that we will confront the more direct/explicit choices I prefer.

Heck this already happens – note the cries to save the jobs of teachers and firefighters when a local community tries to reduce it’s spending to live within it’s means. Do you – and Dan – believe that we will stick to the hard caps or will we find ourselves with no real change in government spending because we can’t cut “critical services” and make any caps ineffective with a long list of “reasonable exceptions”.

With regard to your “we’re at war with some nasty people” justification for continuing a high level of military spend I will only say that I am not prepared to change the world – we have tried that and it is a failure. Killing civillians with Predator drones is a war crime and has made us more hated than feared – which is the root cause of terrorism Rumsfeld cited in his 2004 report.

I am the father of a military family and our daughter barely escaped the Pentagon on 9/11 [a number of friends working in the next room were killed]. I am willing to have an honest debate on whether we as a nation want to declare war against “Radical Islam” and challenge the entire Muslim world to choose sides – and prove they mean it by extending equal rights to women as a first step and rejecting Sharia Law.

One thing that I think can work to bring down spending and deficits is to find ways to incent those who want to work [me and lots of others] beyond the retirement age to continue to do so – and make it a rational economic decision…

The retirement age of 65 was set when people did not live as long and when most workers had jobs that were pretty demanding physically.

But today, writing code or doing market research [what I do] is not physically demanding. I was listening the other day to an NPR interview with 90 year old retired Supreme Court Justice John Paul Stevens [not one of my favorite Supremes] and he is amazing in both is intellect and energy at 90.

Of course we are all different – but there is nothing magical about 65 or 66 or 70 or 75.

I would love to work into my 70s or 80s if I am fortunate enough to be around that long. I know that is not the right thing for everyone, but it may be time to see if we can make retirement age more dependent on what we need and less on what our age is.

The underemphasized but crucial point came at the end of this presentation, almost as an afterthought. Entitlements have to be reformed to keep growth low. Dramatically reformed, as a matter of fact. That means doing big, unpopular things. I am not saying they cannot or should not be done, but it is misleading to make the process of balancing the budget sound like a piece of cake.

[…] This rebuttal video, incidentally, only scratches the surface. There was not enough time to cite the wealth of data and research showing how higher taxes undermine economic performance. There was not enough time to address some of the additional flaws of class-warfare tax policy. And there was not enough time to show how simple it is to balance the budget without higher taxes. […]

[…] out how to reduce red ink. We already know from Congressional Budget Office data, however, that we can balance the budget fairly quickly by limiting the growth of government spending. As the chart illustrates, the deficit disappears by 2016-2017 with a hard freeze and goes away by […]

[…] out how to reduce red ink. We already know from Congressional Budget Office data, however, that we can balance the budget fairly quickly by limiting the growth of government spending. As the chart illustrates, the deficit disappears by 2016-2017 with a hard freeze and goes away by […]

[…] out how to reduce red ink. We already know from Congressional Budget Office data, however, that we can balance the budget fairly quickly by limiting the growth of government spending. As the chart illustrates, the deficit disappears by 2016-2017 with a hard freeze and goes away by […]

[…] out how to reduce red ink. We already know from Congressional Budget Office data, however, that we can balance the budget fairly quickly by limiting the growth of government spending. As the chart illustrates, the deficit disappears by 2016-2017 with a hard freeze and goes away by […]

[…] the first imperative is to stop digging. It would be nice to actually cut spending, but simply limiting the annual growth of federal spending so that it grows no faster than inflation would yield…. The key to fiscal responsibility is making sure the productive sector of the economy grows faster […]

[…] the first imperative is to stop digging. It would be nice to actually cut spending, but simply limiting the annual growth of federal spending so that it grows no faster than inflation would yield…. The key to fiscal responsibility is making sure the productive sector of the economy grows faster […]

[…] the first imperative is to stop digging. It would be nice to actually cut spending, but simply limiting the annual growth of federal spending so that it grows no faster than inflation would yield…. The key to fiscal responsibility is making sure the productive sector of the economy grows faster […]

[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]

[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]

[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]

[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]

[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]

[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]

[…] a bit of academic jargon in that passage, but the authors are basically saying that some sort of annual limit on the growth of government spending is a smart fiscal strategy. And such rules, depending on the country, would have reduced the burden of government spending by […]

[…] a bit of academic jargon in that passage, but the authors are basically saying that some sort of annual limit on the growth of government spending is a smart fiscal strategy. And such rules, depending on the country, would have reduced the burden of government spending by […]

[…] a bit of academic jargon in that passage, but the authors are basically saying that some sort of annual limit on the growth of government spending is a smart fiscal strategy. And such rules, depending on the country, would have reduced the burden of government spending by […]

[…] a bit of academic jargon in that passage, but the authors are basically saying that some sort of annual limit on the growth of government spending is a smart fiscal strategy. And such rules, depending on the country, would have reduced the burden of government spending by […]

[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]

[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]

[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]

[…] But it’s also a high-stakes game. If Obama (or Reid) refuse to accept the fiscal reforms approved by the House and there is a stalemate, the federal government ultimately would lose its ability to borrow from private credit markets. And while that notion has some appeal for many of us, it almost certainly would require more fiscal discipline than the political system is willing to accept (i.e., actual deep cuts rather than just restraining the growth of spending). […]

[…] But it’s also a high-stakes game. If Obama (or Reid) refuses to accept the fiscal reforms approved by the House and there is a stalemate, the federal government ultimately would lose its ability to borrow from private credit markets. And while that notion has some appeal for many of us, it almost certainly would require more fiscal discipline than the political system is willing to accept (i.e., actual deep cuts rather than just restraining the growth of spending). […]

[…] But it’s also a high-stakes game. If Obama (or Reid) refuse to accept the fiscal reforms approved by the House and there is a stalemate, the federal government ultimately would lose its ability to borrow from private credit markets. And while that notion has some appeal for many of us, it almost certainly would require more fiscal discipline than the political system is willing to accept (i.e., actual deep cuts rather than just restraining the growth of spending). […]

[…] Reading this column makes me feel wimpy. I’ve been assuming that Congress eventually will raise the debt limit, and my focus has been on getting Obama and the Senate to give up something in exchange – perhaps some sort of reform of the budget process to restrain spending as a trade for more borrowing authority. I’d like to see, for instance, a rejuvenated version of Gramm-Rudman that imposes limits on spending growth. […]

[…] Reading this column makes me feel wimpy. I’ve been assuming that Congress eventually will raise the debt limit, and my focus has been on getting Obama and the Senate to give up something in exchange – perhaps some sort of reform of the budget process to restrain spending as a trade for more borrowing authority. I’d like to see, for instance, a rejuvenated version of Gramm-Rudman that imposes limits on spending growth. […]

[…] fiscal policy is very simple. Restrain the size and scope of government so that outlays grow slower than the private sector. If that happens, the burden of federal spending will shrink as a share of economic […]

[…] fiscal policy is very simple. Restrain the size and scope of government so that outlays grow slower than the private sector. If that happens, the burden of federal spending will shrink as a share of economic […]

[…] fiscal policy is very simple. Restrain the size and scope of government so that outlays grow slower than the private sector. If that happens, the burden of federal spending will shrink as a share of economic […]

[…] fiscal policy is very simple. Restrain the size and scope of government so that outlays grow slower than the private sector. If that happens, the burden of federal spending will shrink as a share of economic […]

[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]

[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]

Your site is really interesting to me and your topics are very relevant. I was browsing around and came across something you might find interesting. I was guilty of 3 of them with my sites. “99% of website owners are guilty of these 5 errors”. http://tinyurl.com/d8r7ejo You will be suprised how simple they are to fix.

[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]

[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]

[…] This doesn’t mean that Senator Paul is in any danger of winning a Bob Dole Award, but it’s nonetheless unfortunate since a focus on deficits gives an opening for leftists to claim that they can achieve the same outcome with tax increases. This is why sponsors should focus on the importance of spending restraint, and then add explanations of how this eliminates red ink. This is the approach I took in this video showing how limits on the growth of spending would lead to a balanced budget. […]

[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]

[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]